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Russia’s Digital Ruble Pilot Faces Delay as Legislation Amendments Await Approval

The Central Bank of Russia (CBR) has announced a delay in the launch of its digital ruble pilot, now expected to commence by the end of July pending approval from the State Duma. The revised legislation for the central bank digital currency (CBDC) emphasizes the inclusion of non-residents in digital ruble transactions while raising concerns about data encryption and enforcement actions.

Originally scheduled for April 1, the digital ruble pilot has experienced setbacks due to legislative processes. The updated legislation aims to grant unrestricted access to non-residents for digital ruble transactions, distinguishing it from other CBDC initiatives that initially limit foreign usage. This inclusivity is driven by Russia’s desire to establish an alternative payment system in response to international sanctions following the Ukraine conflict.

As the operator of the digital ruble platform, the central bank will have the authority to authorize domestic and foreign banks to participate in CBDC transactions. Non-residents can access the digital ruble through foreign banks, domestic banks, or directly through the central bank, provided it complies with the law. This approach offers flexibility and sets the stage for potential cross-border CBDC initiatives.

Previous reports indicated that the Central Bank of Russia was exploring cross-border CBDC operations and bilateral linkages, although specific partnerships with countries like Iran, India, and China remain unconfirmed. Notably, China and the UAE are involved in the MBridge shared CBDC platform. Alongside CBDC efforts, Russia is also drafting legislation to facilitate cross-border payments using digital assets, including tokenized precious metals.

The CBDC legislation introduces amendments related to data encryption, particularly to protect sensitive information about Federal Security Service personnel and individuals under security protection. However, it raises questions about the encryption of ordinary payment data and suggests the central bank may retain comprehensive payment records, which differs from some western CBDC designs prioritizing privacy and avoiding government surveillance.

Another legal amendment focuses on enforcement actions related to claiming debts against digital ruble wallets. Similar to bank accounts, claims against digital ruble wallets can only be made above a certain threshold, potentially leaving individuals with minimal income vulnerable. While the legislation lacks a subsistence limit, it is expected to undergo revision to address this concern in subsequent iterations.

While Russia faces delays in its digital ruble pilot, it aligns with the global trend of CBDC adoption, as more than 90% of central banks worldwide are actively exploring or pursuing CBDC initiatives. This emphasizes the need for careful navigation through the legislative process to ensure a smooth and secure launch. The enthusiasm for CBDCs remains strong internationally, with central banks recognizing the potential benefits and exploring the possibilities of introducing their own digital currencies.

Alex Lirette

Alex Lirette is a renowned expert in the world of cryptocurrency, with a passion for bitcoin, blockchain, NFTs, and DAOs. He started his journey into the world of cryptocurrency in 2014 and has since continuously expanded his vast knowledge in this field. Alex has become a trusted source of information and insights, with a particular focus on the latest developments in the world of blockchain technology. As a thought leader in the industry, Alex regularly shares his expertise with others through his contributions to the gmBlockchain blog. He is known for his ability to break down complex concepts into understandable and relatable terms, making it easier for people to understand and appreciate the power of blockchain technology.

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